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Financial Services Newsletter - Friday 5th July 2019

05 Jul 2019

Market News

Brown Shipley, experts in wealth planning, investment management and lending, announced that it has agreed to acquire NW Brown & Co Limited, a Wealth Manager based in Cambridge with an additional office in Norwich. The acquisition is part of Brown Shipley’s growth strategy to add further scale and unlock additional regional opportunities. The addition of NW Brown will increase Brown Shipley’s total AUM to almost £9bn. Founded in Cambridge in 1974, NW Brown is a successful Wealth Manager working predominantly with private clients to offer financial planning and investment management services. The business also provides a range of services to corporates, including employee pensions and manages investment portfolios. NW Brown has £1bn of discretionary funds under management and has 74 employees. The acquisition is expected to complete by the end of Q3 2019 subject to regulatory approval. Following completion, NW Brown will be fully integrated into Brown Shipley in 2020, serving as the East Anglia hub for the business and adding to the six existing Brown Shipley offices.

Quilter has bought three advice firms in the South East, adding £211 million of assets to its restricted national advice business. One of the firms acquired by Quilter Private Client Advisers is Petrus Financial Services. According to our 2018 Top 100 the Windsor-based firm had £150 million of assets under advice from 290 clients last year. The firm's Managing Director Philip Dendy will retire following the completion of the deal, as will Advisers Nigel Pearce and David Main. However, Operations Director Georgina Warwick will join Quilter. Dendy said he 'had always planned' to sell to a company that would offer a 'smooth transition' for the firm's clients. Quilter Private Client Advisers has also bought Surrey-based ROC Consultants and Southend-based M.J.S Wilson. ROC Director and Adviser Trevor Allum will retire after clients are transferred to Quilter's London office.

In further news...Network Intrinsic has re-branded as Quilter Financial Planning. Intrinsic’s parent company Quilter, separated from Old Mutual plc in June 2018. Quilter Financial Planning comprises over 3,900 advisers and Quilter Private Client Advisers, described as its high net worth business. Intrinsic has recently acquired the businesses of Charles Derby and Lighthouse, which will rebrand in due course. Andy Thompson, Chief Executive of Quilter Financial Planning said: ‘the power of a strong and trusted brand should not be underestimated.'

Woodford Investment Management is planning to cut staff at its Oxford headquarters following the suspension of Neil Woodford's flagship Woodford Equity Income fund. A Woodford spokesman said the fund group had warned a number of its staff, which stood at 45 according to its most recent accounts, that their roles were at risk.

Fund managers Nick Purves and Richard Colwell have started to dismantle the portfolios they inherited from Neil Woodford, after taking on £3.5 billion of funds the Manager ran for St James's Place (SJP) last month. Stock market filings suggest the pair have sold around £215 million of shares since taking on the £1.4 billion St James's Place UK High Income, £1.5 billion Income Distribution and UK Equity funds. National financial group St James's Place handed the RWC and Columbia Threadneedle Managers the mandate after dropping Woodford in the week the Manager's flagship Woodford Equity Income fund was suspended.

Standard Life's restricted national advice business 1825 is set to drop 750 clients after reviewing whether they are receiving value for money. Following a review of its client bank, 1825 customers who have been judged to have simpler financial needs will be given alternative options about their ongoing service. The 750 clients could be placed into a different financial advice arrangement either externally or internally, or could become non-advised customers. A spokesperson for 1825 said that the business was currently speaking to clients 'about the potential solutions for their ongoing needs' if they have been identified in the review.

In further news...Standard Life-owned national advice business 1825 has bought the advice arm of accountancy firm Grant Thornton, adding £1.7 billion of assets under advice.Earlier this month 1825 had made a £30 million bid for the business. Standard Life has not disclosed how much it paid to complete the deal. The acquisition is 1825's largest to date and will take the restricted national advice firm's assets under advice to £5.8 billion. It will add 34 Financial Planners to the business, meaning that 1825 now has 110 Planners across the country. 1825 Chief Executive Julie Scott said the deal 'significantly accelerates 1825’s growth plans and gives us a broader UK-wide presence'.

The Financial Conduct Authority (FCA) is currently conducting its own review of the Retail Distribution Review (RDR) to examine the impact of the biggest sea change in retail investment regulation the UK has ever seen. Most striking is the 331% increase in average fees and charges by firms, alongside the a 152% increase in average total revenue per firm.

Advice consolidator Perspective has sounded out a number of private equity firms about a potential £60 million sale. Sources familiar with the situation said that four private equity firms have been contacted about the possibility of buying or taking a stake in the company. Audit and advisory giant KPMG has been appointed to help the consolidator with the process of speaking to potential bidders. It is understood the business is seeking a valuation of £50-£60 million. It is unclear whether Mosaic Private Equity, which has invested £12.7 million in Perspective since taking a 55% stake in the business in 2008, will sell its remaining stake.

In further news...Perspective Financial Group's ambitions to catch up the consolidators have taken a step forwards with the appointment of new acquisitions director Kevin Homfray. Homfray, formerly Finance Director at acquisitive Newell Palmer Group, will report directly to Perspective group Finance Director David Hesketh and will be 'instrumental in further delivering the Group’s ambitious acquisitions plans'. Perspective has been busy on the acquisition front since being founded in 2008, with 34 purchases on the books and with more planned in the near future according to the company.

Bristol and London-based financial planning firm Paradigm Norton has become the latest financial planning firm to transfer a majority of its shares to an employee ownership trust (EOT). The transfer of 80% of shares in the company to the EOT gives all 65 staff at the NMA Top 100 firm a stake in its future. Patrick Burns, former Chief Executive of the Employee Ownership Association, has been appointed Independent Chair to oversee the EOT. Chief executive Barry Horner said that the move would allow the business to live up to its 'core values.'

Beckett Investment Management has opened a new office in Ipswich in a bid to boost its professional connections and commit to the area. The new office, which will be populated by six Advisers and their support staff, reflects the firm’s ambition to consolidate its presence in East Anglia. ‘We work very closely with lots of solicitors and accountancy firms and we wanted to be closer to them,’ said director Gavin Wood.

Six new businesses have taken Succession past £8 billion in assets as the company has changed the way it buys advice businesses. Commercial Director Paul Morrish has been put in charge of recruiting member firms, expanding his role to include sounding out potential acquisitions as well as overseeing takeovers. The new structure will overhaul how the company assesses potential acquisitions after it received fresh funds to buy advice businesses earlier this year. Sucession had been handed more than £100 million by private equity backers Inflexion and Ares Capital. 

M&G Prudential is closing four offices as it continues with its demerger from its parent company. The investment provider is closing offices in Reading, Chelmsford and two London bases as part of its new operations strategy following the spin-off from Prudential. The office closures will see 400 roles moved to its new ‘Wealth Solutions’ business in Edinburgh.

Chartered Financial Planner for Ten Wealth Management, Kristian Vind has revealed how he got involved with the Forces MoneyPlan scheme and encourages his peers to play their part too."I have always wanted to use my knowledge to help people with financial problems and had looked at various ways to do so throughout my career (including helping family friends understand the jargon of financial services). When I saw the initiative on the Chartered Insurance Institute (CII) website late last year, I thought this was the right time and right initiative for me, both personally and professionally."

Invesco has sold a 9.3% stake in AJ Bell worth £144.4 million. Bookrunner Numis placed 38 million AJ Bell shares held by Invesco at 380p each to raise the proceeds. Following the disposal, Invesco holds 65,584,970 shares in AJ Bell, representing 16.1% of the firm's share capital. 'Invesco has been a long-standing investor in AJ Bell and has indicated that, following completion of the placing, it intends to remain a significant, long term shareholder of the company,' Numis said in a stockmarket announcement. At 8.05am shares in AJ Bell had fallen by 2.5% to 390p.

National advice firm Ascot Lloyd has launched five new multi-asset and multi-manager funds as it looks to build out its in-house fund capabilities. The five risk-targeted funds, which are structured as Oeics, have been launched with Ascot Lloyd’s Discretionary Fund Manager (DFM) Avellemy and with Investment Fund Services Limited (IFSL) as the Authorised Corporate Director (ACD). The new fund range mirrors Avellemy’s current managed portfolio service (MPS) and Discretionary Fund Management service. The firms said in a press statement it wants the new range to increase Avellemy’s client base and sell the funds to new Advisers. The funds will be available across 13 platforms and use Distribution Technology’s risk profiling software.

Tatton Asset Management has announced two deals to manage money for advice network Tenet Group and national IFA Frenkel Topping. Frenkel Topping has appointed fellow AIM-listed business Tatton to manage its £320 million Discretionary Fund Manager (DFM) proposition, Ascencia Investment Management. Frenkel's DFM business already partners with Wellian Investments and Brooks Macdonald and Tatton will be managing the core and passive products. Tatton has also been appointed by advice network Tenet Group to lead a new managed portfolio service (MPS).

National advice firm Tavistock has announced the end of its 'strategic alliance' with Lighthouse, following Quilter's takeover bid for the business. In a brief market statement, Tavistock said the relationship was being terminated 'with immediate effect.' It had begun on 14 November last year. The agreement also saw Lighthouse take a £1 million stake in Tavistock.

AFH Financial pre-tax profits rose 85% to nearly £6 million as assets under management have swollen by 68% to £5.4 billion, according to its half year figures. For the six months to April 2019 revenues rose from £22.7 million to £36 million year-on-year. During the period AFH completed four acquisitions that added £640 million assets under management. The deals were made for an initial consideration of £7.9 million plus £11.8 million of ‘future deferred consideration’ payable over the next two financial years if the acquired businesses achieve of financial targets.


Market Movers and Shakers

Investec Wealth's Bournemouth office has recruited Investment Manager Alistair Cannings from local rival Brewin Dolphin. Cannings, a Chartered Wealth Manager, will report to Scott Jones, Head of the Bournemouth office. Cannings said: 'I am delighted to be joining IW&I. I look forward to working with the team to deliver tailored portfolios for our clients and further our presence in and around Bournemouth.'

WH Ireland is to shake-up its fund selection process and relocate its team of analysts from Manchester to London following the exit of its research boss. Former Wealth Manager coverstar John Goodall, who had headed the division for 12 years, departed the firm to for a new role in the Midlands, the company said. The exit and subsequent reorganisation was  just one of a series of personnel changes announced by the firm as it continued to pursue a wholesale restructure. Philip Bagshaw, who featured in the Top 30 class of 2018, has been appointed Head of alternatives and portfolio strategy at WH Ireland.

Mattioli Woods Group Managing Director Murray Smith is to stand down, the firm has revealed. Mr Smith will relinquish his berth on the board at the company's next Annual General Meeting on 21 October 2019. He will continue in a full-time role as Founder Director to the Group and his focus will be on his client portfolio, acquisitions and acting as an ambassador for Mattioli Woods. Mattioli Woods said he was “instrumental to the success of the group and in this new role we will continue to benefit from his experience and insight”.

Offshore platform provider Novia Global has announced Steve Andrews will join the firm as its new Managing Director. Andrews joins from Aberdeen Standard Investments, where he was Head of Third Party and Major Distribution and responsible for sales to IFAs and other distribution partners. Andrews will replace Bill Vasilieff, who will become Novia Global’s Chairman. Vasilieff will continue as Chief Executive of the UK platform, Novia Financial.

Transact has appointed two new Non-Executive Directors to its board, including a permanent Chairman. Richard Cranfield, a Partner specialising in financial services at legal firm Allen & Overy, has been made Chairman elect of the platform's parent company IntegraFin Holdings. IntegraFin has also appointed Robert Lister to its board as a Non-Executive Director. Lister is Chairman of the Aberdeen Smaller Companies investment trust and also holds Non-Executive board positions at Credit Suisse Asset Management and Investec Wealth.

Royal London has hired Standard Life Aberdeen Life and Pensions Chief Executive Barry O'Dwyer to take over from Phil Loney at the helm of the mutual insurance company. O'Dwyer is expected to start in his new role as Royal London Group Chief Executive in September. Loney, who announced he was stepping down in December last year, will stand down at the end of June but will be available to help with the transition period until the end of 2019.



All information provided in this Market Digest has been gathered from multiple Financial Services Media sources and individual company press releases.

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